It still captures all the row data as an entire column, not all the columns separated by commas, despite using standard CSV files and explicitly choosing the CSV format before uploading the CSV data. Even following the CSV dialect by default as csv.excel when saving as a .CSV file from Excel.

Correct, .csv files are still problematic. Output tabular format from Excel instead and use that within Galaxy for now. You can also ask the developers for an update on the fix. Directly on the ticket or at Gitter (reference the ticket in your question by link): https://gitter.im/galaxyproject/Lobby